A just-published Federal Judicial Center study of class actions in federal courts finds that there is less to them than might appear. Released yesterday, the report presents preliminary findings from the second phase of an ongoing study of the impact on the federal courts of the Class Action Fairness Act of 2005. It looks at class action activity in the two years leading up to CAFA's effective date. A subsequent report will compare these findings to post-CAFA cases. Of the litigation looked at in this study, the report concludes:

Preliminary findings indicate that in diversity class actions there is less to class allegations than one would expect. Most of the plaintiffs in cases that raised class allegations did not take the next step and move to certify a class. All class actions that were certified, whether for litigation or settlement purposes, ended with class settlements about 10% of the sample. Relatively little motions activity took
place in the typical case, and many cases the majority of cases not remanded to state court ended in a voluntary dismissal. Further analysis and comparison with class actions based on federal questions may shed further light on these observations.

The study looked at 231 class actions filed in or removed to federal court based on diversity of citizenship. Only five of the cases were ever formally certified as class actions, although 21 resulted in court-approved class settlements. Of the cases that came to federal court through removal, more than half ended up being sent back to state court.

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Study: Class Actions Not Such a Big Deal

A just-published Federal Judicial Center study of class actions in federal courts finds that there is less to them than might appear. Released yesterday, the report presents preliminary findings from the second phase of an ongoing study of the impact on the federal courts of the Class Action Fairness Act of 2005. It looks at class action activity in the two years leading up to CAFA's effective date. A subsequent report will compare these findings to post-CAFA cases. Of the litigation looked at in this study, the report concludes:

Preliminary findings indicate that in diversity class actions there is less to class allegations than one would expect. Most of the plaintiffs in cases that raised class allegations did not take the next step and move to certify a class. All class actions that were certified, whether for litigation or settlement purposes, ended with class settlements about 10% of the sample. Relatively little motions activity took
place in the typical case, and many cases the majority of cases not remanded to state court ended in a voluntary dismissal. Further analysis and comparison with class actions based on federal questions may shed further light on these observations.

The study looked at 231 class actions filed in or removed to federal court based on diversity of citizenship. Only five of the cases were ever formally certified as class actions, although 21 resulted in court-approved class settlements. Of the cases that came to federal court through removal, more than half ended up being sent back to state court.